Too many promising startups are floundering: Here’s how venture capital firms can help

If your doctor touted an 8% success rate for surgeries, you’d likely forgo an operation with them. Yet, these are exactly the numbers founders are faced with when securing funding for a startup. This is abysmal—especially considering that startups are the backbone of the economy and the enterprises of tomorrow. 

Not only have startups been let down by the very people allegedly in place to support them—their investors—but those same shareholders have coerced them into the adoption of “best practice” strategies that are outdated and overly generalized. It’s not surprising that those practices have resulted in dramatically higher customer acquisition costs and more competition over time.  READ MORE

How Saudi money returned to Silicon Valley

It was in late March that Silicon Valley decided that it’s no longer shameful to accept massive investment dollars from Saudi Arabia.

“The more I think about it, the more Saudi almost feels like a startup,” Adam Neumann, the WeWork founder, told the audience of the Miami conference hosted by the kingdom.

Venture capitalists Ben Horowitz and Marc Andreessen were pumped up, too. READ MORE

25 Largest VC Backed Companies In The US in 2023

Venture capital-backed companies have played a vital role in driving innovation and economic growth both in the US and internationally. These businesses are frequently in their early phases and have great growth potential, but they lack the funds to expand. In return for an ownership part in the company, VC firms offer financing and expertise to support the expansion of these businesses. Top VC firms like Sequoia Capital, Andreessen Horowitz, GGV Capital, etc have played a great role in funding these companies. According to reports, the rate of job growth for VC-backed businesses is approximately 8 times greater than that of non-VC-backed businesses.  READ MORE

These Ambitious Startup Founders Aren’t Raising Venture Capital Funding, At Least For Now—But They’re Still Growing Their Companies Rapidly.

Patrick Murray is founder of On Air Parking, a startup that brings in $9 million in annual revenue helping consumers find unsold airport parking for a discount, via an app similar to Hotwire. Murray partnered with a private investor in the parking lot industry to get the business off the ground and has hired a president to run the company and its team of about 10 contractors. However, he hasn’t opted to go the venture capital route. READ MORE

WeWork has frittered away $46.7 billion in value and venture capitalists haven't learned a thing

Last week, WeWork was forced to issue an embarrassing press release warning that it was in danger of being delisted from the NYSE because the stock has traded below $1 for so long.

In 2019, prior to a disastrous attempt to go public that resulted in the exodus of its flamboyant, controversial founder, Adam Neumann, WeWork was valued at $47 billion. As of Monday, with shares trading at $0.47 and a market cap of $345.7 million, the company has lost some $46.7 billion in value over four years — vanishing like a sand sculpture left in the wind. READ MORE

Startup nation must grow up

After more than a decade of sustained growth, the venture capital community has experienced a rollercoaster for the last three years. During the pandemic we saw an extreme tide: a huge jump in the adoption of technologies, which was fueled by zero interest and quantitative easing. Towards the end of 2021, a series of threats washed over the economy: global inflation, rapid interest rate increases, the war in Ukraine, damage to supply chains, and a banking crisis. All of these led to a change in the tastes of investors, who shifted the focus from growth at any cost to efficient growth and profitability. The growth rate of companies slowed down, and there was a decrease in the value of public companies and the volume of funding rounds and transactions in the private market. READ MORE

A Founder's Perspective On Bootstrapping Over Raising Venture Capital

As an entrepreneur, one of the biggest decisions I have had to face when building capital is whether to raise venture capital or bootstrap. For many founders, the allure of raising VC seems obvious and offers many advantages.

I experienced this first-hand with my initial startup where I raised over $50 million in VC funding between 2012 and 2017. Prominent VCs from Silicon Valley, New York and Chicago became my equity partners and significant shareholders. This led to a "grow at all costs" mentality, where we tried various growth initiatives, developed multiple product lines and hired highly experienced executives. READ MORE

4 problems venture capital can’t solve

As the technology industry retrenches and venture capital firms tighten their standards, savvy founders should consider this counterintuitive question: Even if my vision is compelling enough to secure funding, should I take it?

Today’s marketplace is teeming with companies that simply grew too quickly, aided and abetted by their VC partners, and now find themselves managing the pain of down rounds, expense reductions, layoffs and a retreat from their boldest strategic gambles. READ MORE

What is consumer venture capital?

Consumer venture capital has weathered multiple market shifts in recent years and is positioned to continue as a force in the venture ecosystem. Though individual consumers may face challenges in the current economic environment, consumer brands will almost invariably stay in demand. Low consumer activity and high consumer company performance might seem to be at odds, but they're not as implausible if we broaden our definition of consumer goods.

While it’s true that people may spend less on luxury goods and non-essentials during periods of economic uncertainty, they still continue to generate business for products and services like food brands and free mobile apps. These may not be our first association when we think of consumer products, but they are a relative constant in a market that is otherwise always in flux. READ MORE

Twitter Backed A Bunch Of Underrepresented VCs. Under Elon Musk, It’s Trying To Dump Them.

In January, the leaders of several venture capital firms that had taken money from Twitter received a note from their last remaining contact at the social media company. Sent from a personal account, the email informed them that the team that stewarded those investments had been obliterated as part of Elon Musk's shambolic takeover of the social media platform.

Someone in Musk’s sphere would likely reach out, the former Twitter employee explained. But neither they, nor their former colleagues, almost all of whom had quit or been laid off, knew who that might be or what would happen next. “The person who did this was trying to help some of the GPs [general partners] who were hurt by [the departures],” one venture capitalist told Forbes. “They apologized for their inability to do better by them.” READ MORE

Big-time VCs link arms for climate coalition

About two-dozen venture capital firms say they are teaming up to “build a robust movement” in the VC business to combat the climate crisis. The group calls itself the Venture Climate Alliance, or VCA.

The coalition counts well-known tech investors, including Tiger Global and Union Square Ventures as members, and said in a joint statement on Tuesday that its goal is to “define, facilitate, and realize net zero-aligned pathways” for early-stage startups.

Several things are happening here. READ MORE

Private equity crackup looming amid higher interest rates and escalating losses

Significant cracks in the $12 trillion private equity business are emerging with big firms like Blackstone Group, Apollo Global management, and other big players failing to meet fundraising goals, asking investors for money and suffering losses on some major funds, Fox Business has learned.

Private equity has been among the best performing investment vehicles in recent years. The firms will buy public companies, take them private and sell them at a profit years later. They also invest in real estate and trade various securities to earn returns that often beat the markets. Unlike big banks and securities firms, they receive less scrutiny from regulators, side-stepping the so-called systemically important designation that brings tremendous oversight. READ MORE

Welcome to a new, humbler private-equity industry

During the past decade it sometimes seemed as if anyone could be a private-equity investor. Rising valuations for portfolio companies, and cheap financing with which to buy them, boosted returns and reeled in cash at an astonishing clip. Improving the efficiency of a portfolio firm, by contrast, contributed rather less to the industry’s returns. As acquisitions accelerated, more and more Americans came to be employed, indirectly, by the industry; today more than 10m toil for its portfolio firms. But last year private equity’s twin tailwinds went into reverse, as valuations fell and leverage became scarce. By the summer, dealmaking had collapsed. Transactions agreed at high prices in headier times began to look foolhardy. READ MORE

Need Funding? Here's How to Pitch Venture Capital and Private Equity Firms in 2023

If there's one thing we all know about business, it's that no cycle lasts forever. Courses correct. Pendulums swing. Bubbles burst. What goes up comes down. So it is for entrepreneurs seeking funding in 2023. After a year of record investment activity in 2021 among U.S. venture capital and private equity firms, rising inflation and recession fears led to a precipitous drop in funding in 2022: The value of VC deals fell by more than 30 percent year-over-year, while PE dealmaking declined nearly 20 percent, according to PitchBook. Then, in March, Silicon Valley Bank failed, shaking up the VC world. Now more than ever, investors are focused on fundamental analysis. Or as Cameron Newton, founder of VC firm Relevance Ventures, says, "People want to see the data. How are you a sustainable business?" A reasonable question at any time. But now -- while times are tight, and VCs are sitting on a record $300 billion of dry powder -- would be a good time to fine-tune your pitch. So how do you land that investor meeting? Here's what seven VC and PE investors say they want to see before writing a term sheet. READ MORE